Part 2 Of Practice Exam For Realestate Module 2

Ahmed leases a 600-sq.-ft. space in an office building. His gross lease rent is $16 per square foot. What's Ahmed's monthly lease payment?

$800

The water and sewer for a property closing on January 10 is billed in arrears. Assuming the sellers own the property the day of closing, which formula(s) can be used to calculate their prorated debit using the calendar year method?

(Monthly expense ÷ 31 days) × 10 days

As ______ property manager, you work with architects and contractors to get the thing built. You may or may not also handle the leasing of the building to tenants.

A real estate development

What's an affidavit as to debts and liens?

A sworn statement by the seller that no unpaid bills remain for repairs or improvements to the property.

Which of the following statements is true regarding a tenant's indemnity?

A tenant's indemnity is usually limited to issues on the leased premises and doesn't include claims or losses that arise from the landlord's or the landlord's agents' negligence or willful misconduct.

Under RESPA's Section 8, which of the following would be considered a kickback?

A title insurance company buys you dinner to thank you for referring a client.

Which of the following is true about adverse possession?

After meeting all of the criteria for adverse possession, an individual automatically owns the property and can obtain a title.

What's required in order to call an auction?

An auctioneer's license

What type of value is of interest to taxing authorities?

Assessed value

The sales price, acquisition costs, and capital improvement costs (such as renovations or additions) of a property combine to make up what?

Basis

The ______ is responsible for paying appraisal and credit report fees.

Buyer

How does the Fed maintain a balanced economy?

By regulating the flow of available funds and interest rates

A comparison of before-tax cash flow to cash invested is known as ______.

Cash-on-cash return

What type of insurance provides two or more forms of coverage (e.g., business crime, business auto, boiler and machinery, marine and farm, liability) for commercial properties?

Commercial multi-peril

Which option is an item on the buyer's checklist to do before closing on a home?

Complete loan application

Which agency administers the Interstate Land Sales Full Disclosure Act?

Consumer Financial Protection Bureau

Which of these principles of value is related to how a change to a portion of a property impacts the value as a whole?

Contribution

On the closing statement, what's the term for an amount that shows up in the party's favor?

Credit

What's the term for an amount that shows up on the closing statement in a particular party's favor?

Credit

Which of the following is an instrument of conveyance?

Deed

Shemar owns a starter home a few miles outside of the city center, and he wants to deed it to his grandson, Tyler. According to the paperwork Shemar had drawn up, Tyler will own the property as long as he continues to pay the property taxes on time. After the second missed property tax payment, ownership would revert to Shemar. What did Shemar place on the deed?

Deed condition

How do you calculate the daily rate for annual taxes using a calendar year?

Divide by 365

Which written statement will be used to consider ways to minimize a project's negative impact on the environment?

Environmental impact statement

Being a retail property manager includes being responsible for ______.

Establishing some leases as percentage leases, where a base rent per square foot is augmented by a percentage share in the tenant's gross

What entity administers the National Flood Insurance Program?

FEMA

Many parks and golf courses are the sites of ______.

Former landfills

Any financial institution with deposits that are insured by a federal government agency can sell mortgages to which institution?

Freddie Mac (FHLMC)

Which of the following terms may be defined as a form of depreciation or loss in value caused by defects in design?

Functional obsolescence

A property manager has just met with Lena, who is interested in renting a vacant unit. What's the best way for the property manager to determine how reliable Lena will be with rent?

Get permission in writing from Lena to run a credit report.

An investor is analyzing a property by looking at its ability to produce future income. The property is a 10-unit apartment building. Which of the following would be used to determine this value?

Gross income multiplier

An investor is analyzing a three-unit property by looking at its ability to produce future income. Which of the following would most likely be used to determine this value?

Gross rent multiplier

Lisa purchased an older home with a large backyard that's perfect for her pack of collies to romp in. Six months after she bought the property, a total stranger knocked on her door and told her he's the true property owner. After investigating, it turns out the person who sold Lisa the property had forged the deed without the true owner's knowledge. What's true about Lisa's situation?

Her title insurance policy may protect her from loss.

What economic principle is related to a property's most profitable use that is both legal and economically feasible?

Highest and best use

Jerry is appraising a five-bedroom home in the suburbs. After identifying the purpose of the appraisal, what does he need to do next?

Identify the data that is needed.

What personal information about the borrower is included in the Uniform Residential Loan Application?

Income

Which of the following best describes an equity real estate investment trust?

Invests in equity by owning income-producing property, such as malls, apartments, or office parks

Which of the following statements about corporate conveyance of real estate in Texas is true?

It is allowed as long as certain rules are followed.

What are accrued expense items?

Items to be divided proportionately between the buyer and seller that the seller owes

Maud has left a gift of personal property in her will to her granddaughter, Emily. Maud is the ________________________ and Emily is the ______________.

Legator, legatee

Who usually represents the lender at a closing?

Lender's attorney

Steven owns 114 acres of wooded, rural land. The abundance of wildlife on his property means that his friends are always asking for permission to hunt on it during various game seasons. If Steven gives a friend permission to hunt on his land, it can be said that he has given his friend a ______.

License

What's the price at which a willing buyer and a willing seller would strike a deal given normal market conditions?

Market value

Craig is a Texas tenant with a written estate-for-years tenancy. How much notice must he give his landlord if he wants to terminate his lease upon expiration of the lease term?

None

What covenants and warranties can be enforced by the grantee when property is gifted without consideration using a warranty deed?

None, because it is a deed of gift

Nonny is purchasing a rental property where the tenants pay month-to-month rent. Which of the following is the most likely way for the rent to be prorated?

Nonny will receive prorated rents beginning the day of closing.

Although a valid deed in Texas doesn't require a grantee's signature, a signature is required if the deed is used to settle property claims in the event of a death or divorce. This type of deed is known as a(n) ______ deed.

Owelty

The ______ is some, but not all, of something.

Part

Which payment plan consists of the borrower making payments of interest and principal on a periodic basis, with a large amount due at the end of the loan term?

Partially amortized payment plan

Which phase of the environmental site assessment involves a review of the property's history and examination of its physical features?

Phase I: Investigation

Marcus bought two adjoining pieces of land that were zoned for commercial use. When he realized that combining the two parcels would dramatically increase the land's value, he jumped at the opportunity. What's this an example of?

Plottage

What is the term for an increase in property value caused by the joining of two neighboring parcels of land?

Plottage

What information about the property is included in the Uniform Residential Loan Application?

Property value

A capitalization rate is the expected ______.

Rate of return on investment

As a licensee, you're helping a couple buy a new home when you come across issues that could mean there's a cloud on the title. What should you do?

Recommend the couple find another property to purchase, or ask the seller to settle the title through a quiet title action to clear any cloud before moving forward with the sale.

Which of the following statements is true regarding the "Bootstrap" program?

Requires the mortgagor to supply at least 65% of the labor.

In a lease agreement, what consideration does the landlord give to the tenant?

Right to occupy the property

Luciana is very successful in her profession, partially because she was fortunate enough to connect with several developers in the early days of her career. Since then, she's built a solid reputation as the "go to" person in the state to list properties on the MLS and show model homes in newly developed communities. What's Luciana's profession?

She's a real estate licensee.

Radon is found in well water and where else?

Soil

The economic principle that tells us that when supply goes up, price goes down is also called ______.

Supply and demand

A like-kind exchange, or 1031 exchange, is also referred to as a ______.

Tax-deferred exchange

Which of the following statements is true of the secondary mortgage market?

The borrower's rights are unaffected.

Appraiser Victor is determining the insured value of a property. What is he evaluating?

The cost to replace or rebuild a property

In a 1031 exchange, there are rules governed by Section 1031 of the Internal Revenue Code. The rules include _______.

The property in an exchange must be like-kind.

You just helped a client buy a house in a neighborhood that's experiencing a rejuvenation. Which of these is likely to occur?

The property will be reassessed as a result of the sale, and this, along with the neighborhood rejuvenation, may cause the taxes on that property to go up.

Kobe's preapproval letter includes all of the following EXCEPT ________.

The property's appraised value

Who is responsible for providing the title insurance company with an affidavit of title?

The seller

Who usually pays the broker commission?

The seller

In Texas, a testator must be of legal capacity. What does that mean?

The testator must be of sound mind and at least 18 years of age.

How are mortgage interest, taxes, insurance, and other similar expenses prorated?

These are usually prorated based on a 360-day statutory year (30 days × 12 months).

Why is it important to publicly record a deed?

Title representatives and attorneys who perform title searches look for documents that are publicly recorded.

What would be an altruistic reason for a municipality to accept a land dedication?

To use the land for public benefit

In the real estate business, which professional funds high-risk loans with less-favorable terms?

Traditional lender

Of the following, which is considered a typical accrued adjustment?

Unpaid real estate taxes

There are a lot more sellers than buyers in the current market. How does this demand influence value?

Value is pushed downward.

Investor Maisy found a great deal on a property. Instead of closing on it herself, Maisy is going to "assign" it to another investor for a fee. What type of investor is Maisy?

Wholesaler